Terminating Sanctions Sought Against Oil Giant for Corrupting U.S. Proceedings

New York, NY – In a move that could end Chevron’s RICO trial before it starts, Ecuadorian villagers and their lawyer have turned over proof to a U.S. court that the oil giant has engaged in a "pattern of misconduct and corruption" by offering illicit payments and outright bribes to secure favorable testimony.

The filing says Chevron’s unlawful payments and bribes to witnesses "have so damaged the integrity" of the proceedings that a fair trial based on competent evidence has become impossible. The defendants asked Judge Lewis A. Kaplan to sanction Chevron by terminating the case.

"When the conduct is this egregious, there is simply no other way to ensure justice than to end the entire proceeding," said Christopher Gowen, an attorney and spokesman who is advising the Ecuadorians and their attorney, Steven R. Donziger.

One of the illicit payments – in the amount of $1 million – was offered as a bribe to the Ecuador judge who wrote the opinion finding Chevron liable for $19 billion in damages for dumping toxic waste into the rainforest. The bribe was intended to coax the judge, Nicolas Zambrano, into renouncing his own ruling which was based on a 220,000-page evidentiary record accumulated over an eight-year trial, according to a sworn affidavit cited in the motion.

Zambrano intends to testify about the bribe offer in the RICO case should it proceed to trial as scheduled in mid-October, according to a recent court filing. Chevron filed the RICO action in New York federal court as a last-ditch attempt to thwart the Ecuador court judgment; the company was also countersued for fraud and extortion by Donziger, who has advised the Ecuadorians for two decades. (A summary of the overwhelming evidence against Chevron as found by the Ecuador court can be read here.)

The latest filing asks Judge Kaplan "to put an end to Chevron and its counsel Gibson Dunn & Crutcher’s intentional and unrelenting pattern of misconduct to corrupt this proceeding with illegal and unethical payments" to witnesses. Absent terminating sanctions, the Ecuadorians and Donziger want the judge to exclude the testimony of at least four key Chevron witnesses.

A summary of the evidence of Chevron’s illegal payments and bribes as outlined in the last motion is as follows:

Chevron lawyer Andres Rivero and another Chevron agent known as "Investigator #5" used a former Ecuadorian judge and key Chevron witness (Alberto Guerra) as a conduit to offer the $1 million bribe to Zambrano, whose sworn affidavit is available here. Rivero recorded himself paying Guerra thousands of dollars in cash out of a suitcase during a secret meeting in Ecuador. Guerra presided over the case for three months in 2003.

Chevron signed a contract guaranteeing Guerra payments at least ten times his annual salary as an Ecuadorian judge in exchange for false testimony where he claims the Ecuadorian plaintiffs bribed him. The exorbitant payments were arranged directly in a meeting in Chicago by Randy Mastro, Chevron’s lead outside counsel at the law firm of Gibson Dunn & Crutcher. Mastro’s practice group already has been sanctioned once by a federal judge in the case for engaging in unethical conduct.

The filing asserts that the benefits given to Guerra constitute criminal violations that run afoul of the Federal Anti-Gratuity Statute, which prohibits payments to non-expert witnesses for testimony. The argument that the payments to Guerra are illegal is supported by a sworn affidavit provided by Erwin Chemerinsky, a prominent ethics expert and Dean of the law school at the University of California, Irvine.

The motion documents that Chevron, by its own admission, not only paid Guerra cash from a suitcase but moved his entire family to the United States; promised him an annual salary of $144,000, or roughly 30 times the per capita annual income in Ecuador; has provided him a car, health insurance, cell phones, a housing allowance, and payments for travel expenses and an immigration lawyer who happens to be none other than Ira Kurzbam, former President of the American Immigration Lawyers Association. Chevron appears to be helping Guerra seek political asylum in the U.S. under false pretenses, said Donziger.

The motion also outlines $2.2 million in payments and "hush money" Chevron made to employee Diego Borja. Borja, who worked for Chevron’s legal team in Ecuador since 2004, has admitted on tape that he was the company’s "dirty tricks" operative during the Ecuador trial. He also admitted he tried to entrap a sitting judge in a bribery scandal, set up dummy companies, and that he and his wife ran a supposedly independent laboratory actually controlled by Chevron. For background on Chevron’s attempts to corrupt the Ecuador trial through Borja, see here.

Chevron also used "coercion and the threat of financial ruin" to blackmail two U.S. scientists, Douglas Beltman and Ann Maest, into disavowing their prior sworn testimony that the oil company is responsible for extensive toxic pollution in Ecuador. Chevron even contacted clients of Stratus to falsely claim that the company had been found to have committed "fraud" in Ecuador as a way to pressure the scientists to "flip" to Chevron’s side.

Chevron also engaged in witness tampering by coercing Christopher Bogart – a former financial backer of the Ecuadorians who runs a litigation hedge fund – to submit a false affidavit claiming he was misled about key parts of the underlying case. Bogart already has been discredited as a liar in a separate court filing that seeks to exclude his testimony.

Chevron’s illegal payments have made it impossible to proceed to trial based on competent evidence with the witnesses in question, according to the motion. The motion cites detailed legal precedent for the request to terminate the case.

"Chevron’s RICO case is weakening due to the company’s corrupt and unethical conduct," said Pablo Fajardo, the lead Ecuador lawyer for the team that won the judgment against Chevron.

The latest filing comes at a time when Chevron is reeling over the risk posed by its own RICO allegations given the obvious credibility problems of its witnesses. The company appears "utterly desperate" to avoid a jury of impartial fact finders, said Gowen.

Just days ago, Chevron said it likely would drop billions of dollars in damages claims so it could avoid a jury trial Chevron instead wants the case decided by Judge Kaplan, who has a long record of bias against the Ecuadorian villagers and earlier was unanimously reversed in the case by an appeals court when he tried to impose an illegal injunction blocking worldwide enforcement of the Ecuador judgment. In a series of recent procedural rulings, Judge Kaplan seems intent on empaneling a jury.

Judge Kaplan is now the target of a rare removal proceeding that will be heard in late September before a New York federal appellate court. That proceeding could derail the trial, which has become the centerpiece of Chevron’s public relations and legal strategy. In the meantime, to pay for a clean-up of their ancestral lands, the Ecuadorians are pursuing billions of dollars of Chevron’s assets in the courts of Canada, Brazil, and Argentina.

The motion also cites the misconduct of Chevron lawyers at the Gibson Dunn law firm who have a track record of presenting false or misleading testimony to U.S. courts on behalf of their corporate clients. The motion asks that the counsel at Gibson Dunn who have been involved in the misconduct, including Mastro, Andrea Neumann and Scott Edelman, be sanctioned as well.

Further damaging Chevron’s prospects, earlier this week Judge Kaplan denied a request to bifurcate the RICO trial into separate proceedings so that Donziger and his clients could not appear side by side. Chevron has a long term strategy to isolate and "demonize" Donziger, a human rights lawyer who has played an instrumental role in the historic 20-year legal battle to hold Chevron accountable for its toxic dumping in Ecuador. Chevron has sued him in the RICO action for close to $60 billion (or three times the amount of the Ecuador judgment plus costs) on the grounds the entire case in Ecuador is a sham, even though the two layers of courts have found against the oil company based on tens of thousands of chemical sampling results.